Lee Cooperman on Wall Street Week: Market Not Cheap, But Not Priced To Perfection Either

Anthony Scaramucci and Gary Kaminsky's Wall Street Week recently interviewed Omega Advisors' Lee Cooperman.  He manages around $9.5 billion nowadays.


On the current stock market, Cooperman says, "It's not cheap, but it's not priced to perfection."

He also addressed the potential looming interest rate hikes by noting that historically, the market is higher one year after the first rate hike.  He says you only have to start to worry once rates get high enough that they start to compete with stock market returns.

He noted, "There's no question that every asset has benefited by our interest rate policy.  Having said that, a bubble is not in the stock market... if there's a bubble, it's in the bond market."  This echoes what Carl Icahn said on his Wall Street Week appearance as well.

Two specific stocks Cooperman commented on were Chimera (CIM) as well as Citigroup (C).

He talked about how he first looks at the market to discern whether it's overvalued or undervalued, and then he drills down to specific companies to see where some value might be.  He's always looking for "more growth at a lower multiple" and likes to hunt for mispricings in the market.

Embedded below is the video of Lee Cooperman's interview on Wall Street Week:



Be sure to check out other recent fund manager appearances, such as Jim Chanoss interview on Wall Street Week.

Lee Cooperman Starts 2 New Stakes, Adds To 4 Positions, Trims Another

Omega Advisors' Lee Cooperman filed a myriad of amended 13G's with the SEC recently.  Here's the breakdown:


Starts 2 New Positions: Aspen Group & Arbor Realty Trust

The hedge fund manager has revealed newly bought stakes in two companies: Aspen Group (ASPU), an online education company, and Arbor Realty Trust (ABR), a specialized real estate finance company.  Both positions were disclosed due to activity on December 31st, 2014.

Cooperman now owns 7.11% of Aspen Group with 8 million shares and owns 7.53% of Arbor Realty Trust with over 3.77 million shares.


Adds to Altisource Portfolio Solutions, Calls Out Management

Also, Cooperman has filed a 13G, Form 3, and multiple Form 4's with the SEC regarding Altisource Portfolio Solutions (ASPS).  He disclosed an ownership stake of 11.14% of the company with over 2.25 million shares as of December 31st, 2014.  This means he's increased his position by almost a million shares since the end of the third quarter.

The Form 4 indicates that Cooperman bought ASPS shares at weighted average prices of $47.47 and $39.42 on December 19th and 22nd, respectively.

Shares of ASPS currently trade around $22 after the company has been hit with regulatory scrutiny as the New York Department of Financial Services (DFS) came down hard on ASPS's biggest customer, Ocwen Financial (OCN), and in turn ASPS as well.  Both companies were part of Bill Erbey's empire and as part of the settlement with the DFS, Erbey will step down from his posts at both companies.

Cooperman also recently appeared on a company conference call and lashed out at management for poor capital allocation decisions, asking "what I'm trying to figure out to be honest with you ... whether your testicles are bigger than your brains or your brains are bigger than your testicles."

The company bought back a ton of stock at much higher prices (around $104 per share) during the period of regulatory scrutiny, only to see their shares plummet much further down to current levels of around $22. 

Numerous hedge funds have been involved in ASPS and OCN shares and it will be interesting to see who held on through the carnage, who exited, and who might have picked up shares as a distressed play at the end of 2014.  Unfortunately, it will be another 3 weeks until those disclosures (Q4 13F filings) are submitted to the SEC.

At the end of the third quarter, the largest holders of ASPS were Luxor Capital, Omega Advisors, White Elm Capital, among others.  Top OCN holders included Pennant Capital, Highfields Capital, Baupost Group, Kingstown Capital, Own Creek Asset Management, White Elm Capital, among others.  Since the end of the third quarter, OCN is down 72% and ASPS is down 78%.


Adds to Atlas Energy & Atlas Pipeline Stakes

Next, the Omega Advisors founder has been out buying shares of Atlas Energy (ATLS).  Per the 13G filing, Cooperman now owns over 7 million shares (an increase of over 2.9 million shares since the end of the third quarter).

Additionally, he has also increased his exposure to Atlas Pipeline Partners (APL) and now owns over 7.45 million shares (compared to the 3.34 million he owned at the end of the third quarter).


Increases Gulf Coast Ultra Deep Royalty Trust Exposure

Next, Cooperman has disclosed an increased position in Gulf Coast Ultra Deep Royalty Trust Units (GULTU).  He previously owned 16.9 million shares but now owns 22.22 million, an increase of over 5.3 million shares since the end of the third quarter.


Slightly Trims Chimera Investment Corp Stake

Lastly, Cooperman disclosed in another 13G that he has ever-so-slightly reduced his stake in Chimera Investment Corp (CIM) by a minor 168,645 shares.  He still retained a position of over 64.3 million shares at the end of 2014.

For more of Cooperman's recent portfolio activity, head here.

Lee Cooperman Ramps Up Chimera Position

Lee Cooperman of Omega Advisors has filed a 13D with the SEC regarding shares of Chimera Investment Corp (CIM).  Per the filing, Cooperman now owns 7.6% of the company with over 77.8 million shares.

This marks a sizable increase of over 62.1 million shares since the end of 2013 when he only owned 15.7 million shares.  The filing was required due to activity on February 24th.

The activist filing indicates Cooperman has met with management and talked with them "regarding the Issuer’s operations, business, strategies and strategic direction. These discussions have reviewed, and may continue to review, options for enhancing shareholder value through various strategic alternatives, improving the Issuer’s operational and financial execution, and general corporate matters."

Per Google Finance, Chimera Investment Corp is "a specialty finance company that invests, either directly or indirectly through its subsidiaries, in residential mortgage-backed securities (RMBS), residential mortgage loans, commercial mortgage loans, real estate-related securities and various other asset classes. The Company is managed by Fixed Income Discount Advisory Company (FIDAC), an investment advisor registered with the Securities and Exchange Commission (SEC)."

For more on this manager, check out some of Lee Cooperman's other recent portfolio activity here.

Lee Cooperman Says Market Fairly Valued, Talks Stocks He's Been Buying (Interview)

Lee Cooperman of hedge fund firm Omega Advisors made an appearance on CNBC today to talk about what he's been buying and what his portfolio looks like.

Cooperman thinks the market is fairly valued right now and that the "Fed will have to remain friendly." He thinks the rest of the year will be determined by which valuation camp wins out.

He thinks a radical change in Fed policy or a recession would cause a drop in the market, but he's not terribly worried about either of those scenarios.

At the same time, he points out how many investors have de-risked drastically and are underinvested.  He says, "what the wise man does in the beginning, the fool does in the end."


Stocks Cooperman Likes

Cooperman mentioned Thomas H Lee Credit (TCRD), a mezzanine lender that yields over 9% and he thinks the dividend goes higher.

We recently posted up excerpts from Omega's Q1 letter if you missed it where he talks about some of his other stock picks.

He likes to buy MLP's when they're trading below net asset value and especially if he can get a decent yield.  He thinks Linn Energy (LINE) has assets worth "in the area of 40."

Cooperman has also sued Tetragon Financial and he believes management should be barred from the industry due to 6 years of bad governance in his opinion and possibly unlawful acts.  He still thinks the stock is undervalued (he owns 14 million shares of it and he started buying in 2009 back during the financial crisis).  In sum, he feels it's solely a management problem.

The Omega Advisors man also talked about Sprint (S), saying he bought it at $2 and then again at $7 and likes that there were 2 interested parties in the company (Softbank and Dish Network), but it looks like.  He said he'll tender 80% of his position, but if it trades at the right price, he'll get back into that chunk of his position.

Cooperman has owned Dish (DISH) for six years and he said it's a mature business and he thinks it'd be worth more with Sprint than without it.  He likes management there.

The hedge fund manager noted that he's "very bottom-up" and some things Omega has been buying recently include Express Scripts (ESRX), Halliburton (HAL), Transocean (RIG), Qualcomm (QCOM), Motorola Solutions (MSI). Sandridge (SD), and Chimera (CIM).


Embedded below is the video of Cooperman's 18-minute interview:



For more on this manager, check out Lee Cooperman's thesis on Covidien (COV) and Sirius XM Radio (SIRI).

Lee Cooperman Says Market is Fairly Valued, Talks Some of His Positions

Lee Cooperman, founder of hedge fund Omega Advisors sat down with CNBC this morning to share his thoughts on the market.

Is the Market Fairly Valued?

"Bernanke's told us everyday since 2009 that he wants higher inflation, more economic growth, lower unemployment,  he wants to create high stock prices to create wealth, to create consumption ... you have to ask yourself as a money manager: has he gotten the market to a zone of overvaluation?"

Cooperman thinks the market is now fairly valued and he thinks every bull market ends at overvaluation.  He concluded that, "So the market's still ok, but it's not a bargain anymore."


On Stocks With Yield

He says he has around 90 holdings and touched on  how investors are looking for yield, so he highlighted some of his positions that fit this mold:

- KKR Financial (KFN): 7.4% yield, growing 5% a year
- Chimera (CIM): accounting issues that he thinks will be resolved this year
- Atlas Pipeline (APL): 7% yield, growing
- Linn Energy (LINE): good yield and growing
- Transcoean (RIG): 4.2% yield and notes Carl Icahn's presence in the name as well

He made an interesting comment on yield as well, saying: "Almost half the S&P 500 right now yield more than bonds."


Growth Stocks He Likes

Cooperman also rattled off some of the stocks he likes that fit under the growth category:  Express Scripts (ESRX), Google (GOOG), and Qualcomm (QCOM).


On Short Selling

Cooperman was asked about Herbalife (HLF) and short selling in general.  He does not have a position in the company but made these comments about shorting: "It's not a wise thing to publicize your short position, and I would not publicize being short 20% of a company."

He also went on to say: "I have no problem with short selling, I think short selling adds some discipline to the market.


Embedded below are the videos of Cooperman's interview:

Video 1


Video 2



Video 3


We've published the rest of Omega's portfolio in the new issue of our Hedge Fund Wisdom newsletter.